The precious metals retraced last week on dollar strength. Gold and silver lost 0.4 per cent and 4.9 per cent as they closed at $2,400.8 and $29.3 per ounce respectively.
Likewise, on the MCX, gold futures was down 0.4 per cent and ended at ₹72,990 (per 10 gram), whereas silver futures lost 3.7 per cent and closed at ₹89,646 (per kg) on Friday.
MCX-Gold (₹72,990)
Gold futures (August) appreciated in the first half to mark a high of ₹74,731 on Wednesday, before giving away all the gains for the week.
Nevertheless, the contract remains above key supports and the broader uptrend is valid. So, gold futures retains the bullishness, which can take it to ₹78,000.
The trend will become bearish only if the contract falls below the price band of ₹70,000-71,000. If this occurs, it can be dragged lower to ₹67,500.
Trade strategy: Retain the longs we suggested at ₹73,050 with stop-loss at ₹69,800. Accumulate if the price dips to ₹71,700. When the contract touches ₹75,000, raise the stop-loss to ₹73,800. Book profits at ₹78,000.
MCX-Silver (₹89,646)
Silver futures (September series) failed to go up early last week, unlike gold futures. But it did fall in the latter half and posted a weekly loss of 3.7 per cent.
There is a crucial support ahead for the contract, at ₹88,300. We expect this to arrest the decline and help in a rebound. In such a case, silver futures can surpass the immediate hurdle at ₹94,500 and rise to ₹1,00,000.
But if ₹88,300 is breached, the price can drop further to ₹82,000, a support.
Trade strategy: Retain the silver futures long, we recommended, at an average price of ₹92,175. Maintain the stop-loss at ₹88,000. When the price surpasses ₹97,500, alter the stop-loss to ₹95,000. Exit at ₹99,800.